Global markets focus on taking risks after Fed's interest increase decision. After a very fluctuating process during two months before Fed's final decision about interest increase, we've started to experience that the global markets started to focus on taking risks nowadays. As expected, the Fed raised the policy rate by 25 basis points to the 0.75-1.00 band.This concern has been left behind and expectations have been maintained as three interest rate increases for 2017 with increasing participation. Growth has been revised from 2.0% to 2.1%, while the core inflation expectation is revised from 1.9 % to 2.0 %, while the unemployment rate is estimated to be 4.7%.
While the Dollar index is losing value, the emerging markets started to gain value. The Developing Country Market Index peaked at 1573 on March 15th. The Fed's interest rate decision and subsequent inbound statements increased the risk appetite of global markets. In our view this table will be most useful for developing countries. According to the financial sources, the Fed must be worried about speeding up interest rates by struggling both its own economy and the global economy. If it does not look as a whole, the success of its own policy will be in trouble. Moreover, the second step may not come until the economic impact of Trump policies has yet to be fully clarified.
- Date: 17 March 2017 Fri 08:31
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